Tech Today: Apple iPhone Still an Empire, Etsy Soars, Veeva Surges

Attendees of the Mobile World Congress arrive in the rain at the Fira Gran Via, Barcelona.

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Here are some things going on today in your world of tech:

It's not snowing in Barcelona like yesterday, but it's still cold and rainy as the MobileWorld Congress, the biggest telecom and smartphone trade show, continues.

Apple still has a lot to like

Apple (AAPL) is not at the show, at least, not officially, but it's always a topic of discussion at Mobile World.

Canaccord Genuity's Mike Walkley writes that his meetings at the show suggest sales of the iPhone X will remain under pressure the first half of this year. That's because the high price is turning away some buyers in North America, while in Asia, Chinese smartphone makers are increasingly offering cheaper devices with similar features in terms of size and shape and display. And Samsung Electronics's (005930KS) "Galaxy S9," introduced this week, undercuts the appeal for the iPhone.

But it's okay, writes Walkley, as Apple's share of smartphone industry profit actually rose in the December quarter, to 87% from 72% in September, and anyway, come the fall, three new iPhone models, "including a larger iPhone X Plus model and a cheaper full-screen LCD iPhone," could make current estimates for iPhone sales too low.

Apple stock today is up $1.09, or 0.6%, at $179.48.

Analog Devices weathers the Apple storm

Speaking of Apple, shares of Analog Devices (ADI) are down $1.09, or 1%, at $91.17, after the company this morning reported fiscal Q1 revenue and profit that were held back by Apple's weaker-than-expected iPhone sales in the December quarter. That led to a 24% decline in Analog Devices's consumer revenue.

But Drexel Hamilton analyst Cody Acree, reiterating a Buy rating on the shares, and a $105 price target, writes that the fall-off in revenue from Apple was made up by strength in the other product areas of industrial, communications and automotive.

The "broad strength looks to be consistent with what we’ve heard from the majority of ADI’s analog peers," he writes, "with a healthy global demand backdrop, plus company specific market share gains, that we expect should continue to support stock price appreciation for both ADI and the group."

Workday sags, Veeva Jumps, Etsy Soars

Among last night’s earnings reports, cloud computing application vendor Workday's (WDAY) shares are down $1.55, or 1.2%, at $126.66 despite a quarterly report and outlook Tuesday afternoon that topped expectations, as Wall Street tried to get its head around the increasing uncertainty from quarter to quarter of a key metric of its business, its growth in what's known as "billings."

Despite that, price targets are rising at several shops.

Another cloud computing application vendor, Veeva Systems (VEEV), which has served exclusively the life sciences industry, is up $7.27, or almost 12%, at $69.34, adding to last night's after-hours gains, after surging last night by almost 8% on better-than-expected results Tuesday afternoon. The company is seeing progress expanding beyond the life sciences industry to things such as chemical makers, packaged goods producers, and cosmetics firms.

Elsewhere in earnings, shares of Square (SQ), the pioneer of card readers that let individuals and small businesses transact, are up 24 cents, or half a percent, at $46.15, following a better-than-expected Q4 report yesterday, but a forecast for profit this quarter that was below what analysts had been expecting.

Even the bears are pretty impressed. Cowen & Co.'s George Mihalos, reiterating a Market Perform rating, and raising his price target to $39 from $36, noted the subdued outlook for Ebitda, writing that "While this could be viewed as a disappointment near-term, we don't expect it to deter from the story so long as SQ can deliver top-line growth of ~25% through 2020E with steady revenue yields."

Valuation keeps Mihalos from recommending the stock.

Online crafts marketplace Etsy (ETSY) is up $4.79, or 23%, at $25.82, adding to last night’s surge, after its quarterly results topped expectations and it offered an outlook for this year’s revenue higher as well.

Price targets are rising for Etsy stock, and the shares also got an upgrade this morning to Buy from Neutral by Roth Capital's Darren Aftahi, who also raised his price target to $28 from $20.50.

Again, even bears are impressed. Stifel Nicolaus's Scott Devitt, reiterating a hold rating and raising ghis price target to $24 from $18, writes that the company's new products and features, "enhanced marketing capabilities, and search / discoverability improvements have resulted in two consecutive quarters of accelerating GMS growth, three consecutive quarters of accelerating revenue growth, and record adj. EBITDA margins in the last two quarters."

"We applaud the management team’s efforts in reinvigorating the Etsy platform, though keep our neutral rating as we believe shares are currently pricing in the opportunity."

Rapid7 cheered, Maxim ditched

Among ratings changes, shares of enterprise security and analytics vendor Rapid7 (RPD) are up 96 cents, or almost 4%, at $26.50, after Stifel's Gur Talpaz started coverage with a Buy rating and a $32 price target, predicting the company can "sustain 30%+ annualized recurring revenue (ARR) growth through 2020, with the company emerging as a nearly pure SaaS security story by that point." "With the market willing to pay a hefty premium for pure subscription stories, we see opportunity for the revaluation of Rapid7's recurring revenue and note that the company offers improving visibility into revenue, earnings, and cash flow at a discount to the SaaS security group."

And shares of chip maker Maxim Integrated Devices (MXIM) are down 15 cents at $61.58, after Macquarie Research’s Srini Pajjuri this morning cut his rating to Neutral from Outperform, citing a 38% run up in the shares the past 12 months, and better performance than the Philly Semiconductor Index since the start of this year.

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